Are you wanting to buy a home but are worried about affording it with these high interest rates? Today, I’m here to show you how to lower your payments with a 2-1 buydown. This is a relatively new product that has now become very popular. The nice thing is that it can be used with an FHA loan, VA loan, and even a conventional loan.
To show you how this product works, I’m going to give you an example. Let’s say the rate at the time you lock in your loan is 6.5%. With a 2-1 buydown, the payments start 2% lower. That means the first year of payments will be at 4.5%. Then, during the second year, the rate will be 1% lower, which is 5.5% in this example. Therefore, this product can make a huge difference in your house payment and get you to a time when rates may start to go down.
“It would be smart to buy a house now and take advantage of this lower payment.”
One great thing for buyers is that only the seller can pay for this. Plus, many financial gurus are predicting that in the last quarter of 2024, rates will begin to tumble. Therefore, you’ll get some relief in the next couple of years and be able to make it to that time.
There is no penalty for refinancing before the two years is up, and the rate is not higher than usual at the beginning if this product is used. I truly believe that it’s smart to buy a house now and take advantage of this lower payment, especially before home prices rise.
If you have any questions about this, please feel free to reach out to me by phone call or email. I would be happy to serve as your resource for all of your lending needs.